Nelson v. Bulso

Decision Date02 October 1997
Docket NumberNo. 97-C-192.,97-C-192.
PartiesKenneth E. NELSON, Plaintiff, v. Eugene N. BULSO, Jr., Defendant.
CourtU.S. District Court — Eastern District of Wisconsin

Gary Ahrens, Gordon P. Giampietro, Michael, Best & Friedrich, Milwaukee, WI, for plaintiff.

Mark F. Foley, James L. Huston, Foley & Lardner, Milwaukee, WI, for defendant.

DECISION AND ORDER

MYRON L. GORDON, District Judge.

Kenneth E. Nelson originally filed his suit against Eugene N. Bulso, alleging that Mr. Bulso is liable for malicious prosecution, abuse of process, and defamation, in Ozaukee County circuit court. Relying on the diversity of citizenship between the parties, Mr. Bulso subsequently removed this action to federal court. Presently before the court is the defendant's motion to dismiss for lack of personal jurisdiction, pursuant to Rule 12(b)(2), Federal Rules of Civil Procedure, or in the alternative, to transfer venue, pursuant to 28 U.S.C. § 1404(a).

Mr. Bulso, in support of his motion, has submitted his own affidavit. Mr. Nelson has submitted no affidavits or other evidence. The defendant argues that the plaintiff cannot rest upon the allegations in his pleading and that Mr. Nelson's failure to respond with his own affidavit is reason enough for the court to grant the motion to dismiss. Contrary to the defendant's argument, however, the court, in resolving a motion to dismiss for lack of personal jurisdiction, may take as true all well-pleaded facts in the plaintiff's complaint, unless any affidavit submitted by the defendant contradicts those facts. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987); see also RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir.1997) (stating that the plaintiff, in opposing a motion to dismiss for lack of personal jurisdiction, "is entitled to have any conflicts in the affidavits resolved in its favor"); Logan Productions, Inc. v. Optibase, Inc., 103 F.3d 49, 52 (7th Cir.1996) ("Because the case was dismissed [on personal jurisdiction grounds] without an evidentiary hearing, we also must resolve all relevant factual disputes in [the plaintiff's] favor.").

I. Factual Background

Mr. Nelson is a resident of Mequon, Wisconsin. (Compl. ¶ 1.) Mr. Bulso is a resident, domiciliary, and citizen of Brentwood, Tennessee. (Bulso aff. ¶ 5.) Mr. Bulso has never owned real property in the state of Wisconsin. (Bulso aff. ¶ 7.) Prior to 1991, Mr. Bulso only visited Wisconsin for "one or more tennis tournaments" while he was a college student in 1980-83. (Bulso aff. ¶ 23.)

This is not the first time that Mr. Nelson and Mr. Bulso have faced each other in litigation. It is, however, the first time, that Mr. Bulso has appeared as a named party. Until now, his role was that of an attorney for Orlando Residence, Ltd. ["ORL"], a party that has been opposite Mr. Nelson in various other lawsuits. (Compl. ¶ 4; Bulso aff. ¶ 8.)

On March 21, 1990, a federal district court sitting in Tennessee entered judgment in favor of ORL and against Nashville Residence Corporation ["NRC"], a company primarily owned and controlled by Mr. Nelson, in the amount of $400,000. (Bulso aff. ¶ 8.) In an attempt to collect on that judgment, Mr. Bulso, on behalf of ORL, came to Milwaukee on March 1, 1991, to take an asset deposition of Mr. Nelson. (Bulso aff. ¶ 9.)

ORL subsequently filed another lawsuit, this time against Nashville Lodging Company, Inc. ["NLC"], a limited partnership owned and controlled by the plaintiff, in the chancery court for Davidson County, Tennessee. (Bulso aff. ¶ 10.) On September 5, 1996, that court entered a judgment against Mr. Nelson and NLC, awarding compensatory and punitive damages to ORL. (Compl. ¶ 5; Bulso aff. ¶ 10.) That court also set aside as a fraudulent conveyance a 1986 transfer of real property to NLC from NRC. (Compl. ¶ 5.) The Tennessee court of appeals reversed and vacated that judgment on December 18, 1996. (Compl. ¶ 5.) Orlando Residence, Ltd. v. Nashville Lodging Co., 1996 WL 724915, at *7 (Tenn.Ct.App. Dec.18, 1996).

NLC filed a bankruptcy petition in the bankruptcy court in the eastern district of Wisconsin on January 2, 1996. (Bulso aff. ¶ 13.) ORL subsequently filed a motion to dismiss that petition, arguing that it had been filed in bad faith, and in February of 1996, Mr. Bulso flew to Milwaukee to appear at a hearing in the bankruptcy court. (Bulso aff. ¶ 15.) Mr. Bulso again flew to Milwaukee on June 21, 1996 to appear at another hearing about Mr. Nelson's petition in the bankruptcy court. The defendant also had a "small number" of telephone conversations with local counsel in Milwaukee regarding the petition. (Bulso aff. ¶ 24.)

On December 15, 1995 Mr. Bulso wrote a letter to the district attorney's office for Davidson County, Tennessee about Mr. Nelson's alleged misconduct in his conveying of property from NRC to NLC and in his assignment of NLC's right to receive rental income to Agincourt Partners, another partnership in which Mr. Nelson is a partner. (Bulso aff. ¶ 12.) On January 26, 1996, February 14, 1996, and March 19, 1996, Mr. Bulso again wrote letters discussing Mr. Nelson to the district attorney's office. (Bulso aff. ¶¶ 14, 17, 19.) On March 26, 1996 and April 26, 1996, Mr. Bulso responded to requests for information from the district attorney's office. (Bulso aff. ¶ 19-20.) On or about June 18, 1996, Mr. Bulso testified before a grand jury, pursuant to a subpoena, about Mr. Nelson's alleged misconduct. (Bulso aff. ¶ 21.)

On June 21, 1996, the grand jury in Tennessee indicted Mr. Nelson for hindering secured creditors, and a warrant for his arrest was issued. (Compl. ¶ 10.) The metropolitan police department in Nashville provided information regarding the arrest warrant to the National Criminal Information Center. (Compl. ¶ 11.) On July 17, 1996, Mequon police officers, at the request of the Nashville police department, arrested Mr. Nelson in his home, and he spent that night in the Ozaukee County jail. (Compl. ¶¶ 9, 14.) Mr. Nelson was released on bail the next day. (Compl. ¶ 14.) The state of Tennessee requested extradition for Mr. Nelson in early October, and the Ozaukee County circuit court approved Mr. Nelson's stipulation that he remain under bail pending the conclusion of extradition proceedings before the governor. (Compl. ¶¶ 17-18.)

On November 27, 1996, the district attorney for Davidson County, Tennessee, notified Mr. Nelson that his office was going to terminate its prosecution of him. (Compl. ¶ 19.) A judge in the criminal court in Davidson County entered an order terminating Mr. Nelson's indictment on December 12, 1996. (Compl. ¶ 20.)

II. Analysis

The defendant's primary contention is that this court does not have personal jurisdiction over him and that the court should therefore dismiss this action pursuant to Rule 12(b)(2), Federal Rules of Civil Procedure. The precise question in this case is novel: whether a nonresident defendant who notified authorities in Tennessee about potential criminal conduct in that state and who testified before a Tennessee grand jury, but whose actions allegedly injured the plaintiff in Wisconsin, can be subject to the jurisdiction of a court sitting in Wisconsin.

A federal court sitting in Wisconsin has personal jurisdiction over the parties in a diversity case only if a Wisconsin state court would have such jurisdiction. Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 2523, 135 L.Ed.2d 1047 (1996). Therefore, this court must resolve two questions. First, it must determine whether the Wisconsin long-arm statute, Wis. Stat. § 801.05, applies to Mr. Bulso. Mid-America Tablewares, Inc. v. Mogi Trading Co., 100 F.3d 1353, 1358-59 (7th Cir.1996); see In re All-Star Ins. Corp., 110 Wis.2d 72, 76, 327 N.W.2d 648 (1983). Second, if the long-arm statute does apply, the court must then decide whether its exercise of jurisdiction over Mr. Bulso comports with the due process requirements of the Fourteenth Amendment. Mid-America Tablewares, 100 F.3d at 1359; see In re-All Star, 110 Wis.2d at 76, 327 N.W.2d 648. It is Mr. Nelson's burden to prove that personal jurisdiction exits. RAR, Inc. v. Turner Diesel, Inc., 107 F.3d 1272, 1276 (7th Cir.1997); State ex rel. N.R.Z. v. G.L.C., 152 Wis.2d 97, 104, 447 N.W.2d 533 (1989).

A. Wisconsin Long-Arm Statute

Mr. Nelson correctly points out that this court is to construe the Wisconsin long-arm statute in favor of the exercise of jurisdiction over Mr. Bulso. Federated Rural Elec. Ins. Corp. v. Inland Power and Light Co., 18 F.3d 389, 391 (7th Cir.1994); Lincoln v. Seawright, 104 Wis.2d 4, 9, 310 N.W.2d 596 (Wis.1981). Moreover, the long-arm statute in Wisconsin is intended to reach to the fullest extent allowed under the due process clause. Mid-America Tablewares, 100 F.3d at 1359; N.R.Z., 152 Wis.2d at 105, 447 N.W.2d 533.

The plaintiff argues that two sections of the state long-arm statute allow this court to exert personal jurisdiction over Mr. Bulso. Both of these sections apply to torts that are committed against someone within the state of Wisconsin.

1. Local Act or Omission

The first section of the long-arm statute, entitled "local act or omission," states that jurisdiction exists "[i]n any action claiming injury to person or property within or without this state arising out of an act or omission within this state by the defendant." Wis. Stat. § 801.05(3).

a. Consequences in Wisconsin

The plaintiff's first argument as to the local act or omission section of the statute is that Mr. Bulso should be subject to the jurisdiction of a court sitting in Wisconsin simply because the plaintiff claims that the defendant "caused" Mr. Nelson's arrest and jailing in Wisconsin and that he published defamatory comments in Wisconsin.

The mere foreseeability that the defendant's actions in one state would cause injury in another state, however, does not amount to the defendant's causing a local act or omission, as defined by the long arm statute...

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